{"id":1094886,"date":"2019-01-17T20:04:32","date_gmt":"2019-01-17T20:04:32","guid":{"rendered":"http:\/\/www.kereport.com\/?p=50068"},"modified":"2019-01-17T20:04:32","modified_gmt":"2019-01-17T20:04:32","slug":"craig-hemke-from-tf-metals-report-thu-17-jan-2019","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1094886","title":{"rendered":"Craig Hemke from TF Metals Report &#8211; Thu 17 Jan, 2019"},"content":{"rendered":"<p>Outlining Some Similarities Between 2010 and 2019<\/p>\n<p>Craig Hemke, Founder of TF Metals Report shares some insights on a recent article her wrote comparing 2010 to 2019. We look at Fed policy,  general sentiment for the metals, and overall market positioning. Be sure to read his full article posted below. <\/p>\n<figure class=\"wp-block-audio\"><audio controls src=\"http:\/\/www.kereport.com\/wp-content\/uploads\/2019-01-17-Craig-Hemke.mp3\"><\/audio><\/figure>\n<p><a href=\"https:\/\/www.tfmetalsreport.com\/\">Click here to visit Craig&#8217;s site for more metals commentary.<\/a><\/p>\n<p>Here is the article looking at the scenario in 2019. <\/p>\n<p>By Craig Hemke<\/p>\n<p>For<br \/>\n each of the past several years, we&#8217;ve written January posts that helped<br \/>\n to serve as a road map for the year ahead. Though crystal ball gazing<br \/>\nis an inexact science, on balance we&#8217;ve done a pretty good job with<br \/>\nthese forecasts. As 2019 dawns, we thought we should give it another try<br \/>\n today. <\/p>\n<p>Let&#8217;s begin with where we&#8217;ve been&#8230; <\/p>\n<p>After<br \/>\n the election of Trump in November 2016, a narrative was quickly<br \/>\nassembled and shoved down our collective throats. This narrative<br \/>\nincluded a strong dollar, a bursting of the bond bubble, a roaring stock<br \/>\n market and falling gold prices. We felt this was mostly garbage, and we<br \/>\n wrote about it here: <a href=\"https:\/\/www.tfmetalsreport.com\/blog\/8103\/questioning-generally-accepted-narrative\">https:\/\/www.tfmetalsreport.com\/blog\/8103\/questioni&#8230;<\/a> <\/p>\n<p>Heading<br \/>\n into 2018, the establishment theme was a strong dollar that would drive<br \/>\n the U.S. economy and stock market forward. Again, this was all supposed<br \/>\n to lead to falling gold prices. We didn&#8217;t buy it, and instead listed<br \/>\nthree primary themes that would drive events through the year. You can<br \/>\nread all about it here: <a href=\"https:\/\/www.tfmetalsreport.com\/blog\/8755\/three-themes-2018\">https:\/\/www.tfmetalsreport.com\/blog\/8755\/three-the&#8230;<\/a> <\/p>\n<p>So, how&#8217;d we do? <\/p>\n<p>Again,<br \/>\n on balance we did quite well. Yes, the stock market rose in 2017, but<br \/>\nthe dollar fell, the bond market bubble did not burst and gold prices<br \/>\ngained more than 10%. And last year, despite all of the dollar<br \/>\nbullishness that permeated and drove most markets, the dollar index only<br \/>\n gained 4.6%, and by late in the year, the Political Risk that was<br \/>\nlisted as Theme #1 was definitely taking hold and driving the dollar<br \/>\nlower. Yes, the price of gold fell in 2018, but in the end, the decline<br \/>\nwas less than 3%\u2014a far cry from the doom and gloom so many generalists<br \/>\nhad predicted. <\/p>\n<p>Thus<br \/>\n here we are in 2019, and the time has come again to post some long-term<br \/>\n projections. What excitement will the year bring, and how will all of<br \/>\nthis impact gold and silver prices? <\/p>\n<p>Well,<br \/>\n if you&#8217;re a member of this site, then you likely already know where<br \/>\nwe&#8217;re headed with this. If you&#8217;re not, then perhaps the title of this<br \/>\npost gives it away. To put it succinctly, the year 2019 will closely<br \/>\nresemble the year 2010 in regards to the economy, the dollar and Fed<br \/>\npolicy. Most importantly, these factors will all combine to drive gold<br \/>\nand silver prices to their best year since 2010\u2014when COMEX gold rose<br \/>\nnearly 30% and COMEX silver rose by an amazing 83%! We may not be able<br \/>\nto duplicate these gains in 2019, but we&#8217;re going to do pretty well.<br \/>\nThat&#8217;s almost certain. <\/p>\n<p>And why do we say this with such confidence? Again, the answers lie in the macro-similarities to 2010. To wit: <\/p>\n<ul>\n<li>The<br \/>\n U.S. economy began 2010 in a recovery mode from The Great Financial<br \/>\nCrisis. The mainstream media banged on incessantly about &#8220;green shoots&#8221;,<br \/>\n and GDP growth was positive. In fact, Q2 of 2010 saw GDP grow by 3.7%,<br \/>\nQ3 was +3.0% and Q4 was +2.0%. <\/li>\n<li>The<br \/>\n Fed had initiated the first QE program to monetize the debt in March of<br \/>\n 2009, but it was completed in 2010. It was generally considered a<br \/>\none-off and a success\u2014and also never to be needed or repeated again. <\/li>\n<li>And<br \/>\n the dollar rose, as the U.S. economy was perceived to be recovering<br \/>\nfaster than the rest of the world. The dollar index posted a 2010 gain<br \/>\nof 1.5%. <\/li>\n<\/ul>\n<p>For the just-completed 2018: <\/p>\n<ul>\n<li>The U.S. economy was reported to have grown nicely, with gains of 2.2% in Q1, 4.2% in Q2 and 3.3% in Q3. <\/li>\n<li>The<br \/>\n Fed hiked the fed funds rate every quarter to the point where this<br \/>\novernight rate is now at 2.50% and the full yield curve is essentially<br \/>\nflat. <\/li>\n<li>And<br \/>\n the dollar rose, as the U.S. was perceived to have the strongest<br \/>\ndeveloped economy. As mentioned above, the total gain for the dollar<br \/>\nindex in 2018 was 4.6%. <\/li>\n<\/ul>\n<p>Turning<br \/>\n back to a decade ago, the U.S. never made it to renewed prosperity in<br \/>\n2011. After peaking in Q2 2010, the U.S. economy began to visibly slow<br \/>\nand the dollar began to decline with it. Similarly, a funny thing<br \/>\nhappened on the way to higher interest rates and balance sheet<br \/>\nnormalization in 2018. Just as in 2010, the U.S. economy began to slow<br \/>\nand the dollar began to decline. <\/p>\n<p>And<br \/>\n now here we are, with a sense of deja vu all over again. Under similar<br \/>\ncircumstances, the Fed reverted to their original intentions in November<br \/>\n of 2010 and announced what was dubbed &#8220;QE2&#8221;, a second QE program that<br \/>\npromised another $600B in bond buying. This plan allowed the Fed to buy<br \/>\neven more garbage securities from their member Banks, as well as<br \/>\nmonetize an additional $300B in U.S. debt. The market reaction was swift<br \/>\n and consequential by late 2010. <\/p>\n<p>Through<br \/>\n 2011, the dollar fell sharply and a crisis of confidence grew to the<br \/>\npoint where in August 2011, U.S. gridlock, government shutdown and debt<br \/>\nceiling debates led to the first S&amp;P downgrade of U.S. credit<br \/>\nquality in history. <\/p>\n<p>As<br \/>\n you&#8217;ll recall, the dollar prices of gold and silver skyrocketed. As<br \/>\n2010 began, COMEX gold was trading near $1100 per ounce. By early<br \/>\nSeptember 2011, it reached $1920. COMEX silver was even crazier. It<br \/>\nbegan 2010 near $17 and was still just $18 in early August. However, the<br \/>\n crisis of confidence brought about by the reversal of Fed policy (QE2)<br \/>\nand an epic short squeeze of The Banks in early 2011 led to a peak of<br \/>\n$48 by late April 2011. Yes, that was a gain of nearly 150% in about<br \/>\neight months. <\/p>\n<p>Can this happen again? Of course it can. A better question is: will it happen again? And now we get to the point of this post. <\/p>\n<p>As<br \/>\n laid out above, economic conditions and Fed policy as we begin 2019 are<br \/>\n very similar to what we experienced in 2010. This alone should get your<br \/>\n attention. However, consider all of the additional extenuating<br \/>\ncircumstances at present: <\/p>\n<ul>\n<li>Political<br \/>\n discord in the U.S. is at levels unseen for decades, with the very high<br \/>\n likelihood of congressional investigations and even impeachment of the<br \/>\npresident. Not only will this serve to create massive legislative<br \/>\ngridlock, it will also derail any hope and confidence the American<br \/>\nconsumer may have for the year ahead. <\/li>\n<li>Falling<br \/>\n consumer and business confidence will lead to economic slowdown, lower<br \/>\ntax revenue at all levels and falling home prices. <\/li>\n<li>All<br \/>\n of this leads to an exacerbation of U.S. government debt levels. With<br \/>\ntrillion dollar deficits projected through the next decade (and these<br \/>\nare based upon 2+% economic growth!), the U.S. national debt will<br \/>\nexplode, along with the interest costs to service this accumulated debt.\n <\/li>\n<li>And<br \/>\n this will matter in 2019. The total debt in 2010 was just $12B, and<br \/>\nthere was hope that the U.S. could &#8220;grow out of it&#8221;. The next recession<br \/>\nwill finally bring with it the realization that that&#8217;s not possible. <\/li>\n<\/ul>\n<p>Ultimately,<br \/>\n The Fed will be forced to reverse their current policy of rate hikes<br \/>\nand balance sheet reduction. Will they hike the fed funds rate again in<br \/>\nMarch? I have no idea, and frankly, I couldn&#8217;t care less. They will<br \/>\neither not hike in March and begin a move toward rate cuts and QE by<br \/>\nlater this year OR they will hike fed funds in March and begin a move<br \/>\ntoward rate cuts and QE by later this year. So what&#8217;s the difference? <\/p>\n<p>COMEX<br \/>\n gold and silver have already begun to decipher the situation, and THIS<br \/>\nis the reason they have begun to move higher after bottoming for good<br \/>\nback in November. Oh sure, the stock market weakness of December helped<br \/>\nwith a few extra bids, but that influence was minor compared to the<br \/>\nawakening that gold and silver have had to the pending Fed changes and<br \/>\nfiscal crises of 2019. <\/p>\n<p>We&#8217;ve<br \/>\n often stated recently that the calendar year of 2019 will see COMEX<br \/>\ngold and silver post their best gains since 2010. Of this, we are<br \/>\ncompletely certain. Will these gains be 30% for gold and 80% for silver?<br \/>\n Maybe, but probably not. We were early by about six months in<br \/>\nprojecting the economic turn last year, and we may be early by six<br \/>\nmonths in projecting the Fed&#8217;s turn in 2019 too. However, what IS<br \/>\ncertain is that The Fed will eventually be forced to reverse course,<br \/>\njust as they did in 2010, and when they do, the reaction in COMEX gold<br \/>\nand silver will be even greater than it was in 2011. <\/p>\n<p>Why?<br \/>\n Because this time there will be no reversal of course and confidence.<br \/>\nThe Bernanke Fed was able to convince the world that the $1T of QE3 in<br \/>\n2013 would be beneficial, and lead to a stronger dollar versus the ECB&#8217;s<br \/>\n euro and the BoJ&#8217;s yen. Confidence in the dollar returned, and the<br \/>\nmetals fell dramatically. Not this time. Eight years down the road have<br \/>\nled us to a place where, once the realization sets in that the central<br \/>\nbanks have no broad plan and that all they can do is create fiat<br \/>\ncurrency, the COMEX metals will soar and then remain on an upward<br \/>\ntrajectory for the foreseeable future. <\/p>\n<p>Of<br \/>\n course now, don&#8217;t go thinking that this will be easy and that The Banks<br \/>\n will simply stand down and allow prices to run. Experience has taught<br \/>\nus that this will NEVER be the case! Instead, expect COMEX precious<br \/>\nmetal prices to resume the typical bull market pattern that we witnessed<br \/>\n from 2002-2011. Price will move two steps forward while Specs<br \/>\naccumulate longs and<br \/>\n Banks issue shorts, and price will fall one step back as the inevitable<br \/>\n &#8220;Spec Wash and Rinse&#8221; occurs. However, the overall trend and momentum<br \/>\nwill be undeniably higher for all of the reasons laid out in this post. <\/p>\n<p>So,<br \/>\n go now and begin to plan accordingly. Diversify your portfolio by<br \/>\nfollowing the lead of the Chinese, the Russians and many other<br \/>\nsovereigns with dollar reserves. Perhaps you might accumulate a few<br \/>\nmining shares, after doing some thorough research and due diligence.<br \/>\nAnd, most importantly, add to your stack of <a href=\"https:\/\/www.sprottmoney.com\/\"  rel=\"noreferrer noopener\">physical precious metal<\/a> while you still can and while prices remain at these affordable levels. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Outlining Some Similarities Between 2010 and 2019<br \/>Craig Hemke, Founder of TF Metals Report shares some insights on a recent article her wrote comparing 2010 to 2019&#8230;.<\/p>\n","protected":false},"author":20,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[538,550,362],"tags":[48],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1094886"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1094886"}],"version-history":[{"count":1,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1094886\/revisions"}],"predecessor-version":[{"id":1094887,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1094886\/revisions\/1094887"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1094886"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1094886"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1094886"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}